USTelecom supports complete repeal of the regressive federal excise tax (FET) on communications.  This tax increases the cost of communications services for consumers, and is contrary to the national goal of having an advanced, highly efficient, low cost communications network to serve the American people.

Two bills have been introduced in the Senate: S. 140, sponsored by Senator Charles Schumer (D-NY); and S.170, introduced by Senator John Ensign (R-NV).  In the House, H.R. 1194 is sponsored by Representatives Lewis (D-GA)/Ramstad (R-MN)/Boucher (D-VA)/Miller (R-CA).  The President proposed full repeal of the FET as part of his FY ’08 budget. Most of the FET was eliminated in 2006 when the IRS stopped collecting the tax on long distance and bundled services. The tax that remains is extremely regressive because only those who have stand alone local service are left paying the tax (a large percentage of which are lifeline and linkup subscribers). The cost of repealing the tax has dropped precipitously – the Administration estimates that the cost for the repeal would be just more than $1 billion over 10 years to eliminate the remaining tax, down from a cost of $60 billion over ten years at the beginning of the 109th Congress.

The R&D Tax Credit expired at the end of 2007.  USTelecom supports a permanent, seamless and strengthened extension of this tax credit that promotes innovation in telecom and other industries.

USTelecom is working with the Family Business Estate Tax Coalition and supports permanently ending the federal estate tax.  In 2001, Congress voted to phase out and end the federal estate tax.  Unfortunately, because of the so-called “sunset provision” contained in the 2001 law, the estate tax will be fully repealed for only one year, in 2010. Unless the law is changed, the tax will be reinstated in 2011.

USTelecom supports tax provisions which help facilitate broadband deployment.

USTelecom supports ending all forms of discriminatory telecom taxation.  Consumers now face an average telecom tax rate of 18.75% -- a whopping three-fold disparity of the average 6.12% tax rate on general business services, according to a recent study by the Council on State Taxation (COST).